Experts critical of market-linked products

Despite being billed as the perfect investment product, market-linked GICs are raising red-flags with critics – even being called “an embarrassment to the wealth management industry”. These critics are concerned that products like these are being used to prey on the least knowledgeable investors.

While the products themselves are relatively safe, fees are high and the rewards tend to be mostly realized by the banks. These facts have not gone unnoticed by Canadian securities regulators who have concerns about the complexity and lack of transparency of these market-linked products.

It is exactly because of products like these that CARP is fighting to protect investors from bad investment products and advice by establishing regulatory standards and meaningful enforcement mechanisms.

For the small investor the important takeaway is: if you don’t understand the product, don’t invest.